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Supreme Court may resolve divide over whistleblower protections

The Supreme Court may finally settle one of the fiercest debates arising from the Dodd-Frank Act: What is a whistleblower and when are they protected against corporate retaliation?

At issue is a lack of clarity—and plenty of legal confusion—regarding reporting baselines in the Sarbanes-Oxley Act and Dodd-Frank Act. Confusing language in the latter is a big part of the problem.

Under one interpretation, whistleblowers are only entitled to anti-retaliation protections and cash awards if they report to the Securities and Exchange Commission. Another reading of the law implies that any effort at internal reporting is protected.

As for SOX, it has different statutes of limitations and, notably, requires whistleblowers to report both internally and to the Department of Labor.

“The question for resolution is whether a whistleblower must first report the information to the SEC to be protected under the statute,” says Thomas Gorman, a partner at... To get the full story, subscribe now.